Tips to take advantage of low mortgage rates

WASHINGTON – Every week, mortgage rates seem to slip lower, but knowing the right time to take the plunge can be tricky.

There are many factors for homeowners to consider, including how long they plan to live in the home. It’s also important to make sure refinancing leads to a lower interest rate, a lower monthly payment or a shorter loan term.

In some instances, homeowners need to figure a fraction of a percentage point into the cost of the loan and, at other times, closing costs.

Steve Cohen, a loan officer with First Place Bank, says it will depend on the size of the loan and where buyers live. Typically, closing costs run between $2,200 and $3,200.

However, Cohen is seeing about 70 percent of his customers opting for a “no- closing cost refinance.”

He says that locks in a rate, slightly higher than the lowest rate out there, but there aren’t any closing costs.

“In an environment like we have where rates are extremely low and seem to be getting lower all the time, you don’t really want to invest too much into this refinance because you might have the opportunity to do it again in six months,” says Cohen.

Typically a bank cannot help a homeowner refinance for at least six months, but a customer can go to another lender to obtain another refinance deal faster.

Cohen says rates are very competitive from bank to bank, but it always pays to shop around.

Buyers will need a high credit score to qualify for the lowest rates out there. Cohen says any credit rating above 700 is considered in the top range.